Ansarollah Website – Reports
Amin Nasser, Chief Executive Officer of Saudi Arabia’s Aramco, announced that the shortage of crude oil and refined fuel supplies might worsen, warning that replenishing the tapped global stockpiles could take up to two years.
Speaking at the Energy Intelligence conference in London, Nasser added: "Until the Strait of Hormuz is fully reopened and confidence is restored, the harsh reality dictates increasing pressure on both sides of the oil equation." He clarified that "even if that happens, rebuilding stockpiles while simultaneously meeting demand could take up to two years."
In this context, Aramco unexpectedly lowered its Official Selling Prices (OSPs) for its crude grades for November loading to Asian buyers to their lowest levels in six years, while raising them for buyers in Northwest Europe and the Mediterranean region.
A pricing document showed that Saudi Arabia set the November OSP for its flagship Arab Light crude for Asian buyers at a discount of $5.00 a barrel to the Oman/Dubai average, down $3.00 from the previous month. According to Reuters data, this discount is the largest since June 2020.
Aramco also reduced the November OSPs for its heavier grades, Arab Medium and Arab Heavy, sold to Asia, by $5.00 a barrel.
Three sources in the Asian refining sector told Reuters that the OSP cuts appear intended to compensate buyers for soaring freight costs.
Data from the London Stock Exchange Group (LSEG) revealed that the time-charter cost of hiring a Very Large Crude Carrier (VLCC)—capable of transporting two million barrels of oil from the Gulf to China—reached $1.2 million per day on Friday, compared to approximately $80,000 per day a year ago.
One source noted that the lower OSPs might also offset the extended waiting times and longer transit routes for Saudi oil exported via the Egyptian port of Sidi Kerir, where shipment loading operations have experienced delays.
